Thursday, October 10, 2024

Starmer’s interventionist state is preparing for battle -Dlight News

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A search for gunpowder in the cellars. A silver mace riding in its own carriage. The King intoning the new government’s prospectus, to a sea of red and ermine. Britain can still do pomp and circumstance. And with political turmoil in France and America, there is something to be said for a monarchy whose very existence reminds our leaders that they have no God-given right to rule. 

The length of the King’s Speech — it was almost unbearable to watch King Charles balancing the heavy crown on his head for so long — signals Labour’s belief in state machismo. Sir Keir Starmer’s government looks set to be the most interventionist since the 1970s. He plans to force through housebuilding, nationalise the railways, create an industrial council and a state-backed energy company, roll back curbs on trade unions and usher in new employment rights. Renters will get more rights and there will be new state agencies — including a football regulator — added to the alphabet soup of acronyms. 

It is not time, though, to start hyperventilating about Marxism. Starmer’s prospectus is radical, but not revolutionary. More homes are urgently needed, given Britain’s explosion in population. Abysmally performing train operators should be taken over when their franchises expire. A more statist industrial policy is firmly in line with the current Washington consensus. The ban on onshore wind farms was absurd, and Labour is right to have already reversed it. 

Two internal contradictions in the speech suggest that Starmer’s default position is likely to be dirigiste. The pledge to devolve more power to local authorities jars with the determination to centralise planning. And there is a glaring tension between the economic growth rhetoric, and the raft of new employment rights which will end Britain’s claim to have a flexible labour market. It may well be true, as ministers argue, that insecure jobs depress productivity. It may also turn out that extending day one and union rights will lead to more strikes, and companies hiring fewer people in the UK. 

Refreshingly, this is not a government with a naive faith in the state to cure all ills. The Health Secretary Wes Streeting has lost no time in declaring that the NHS is broken. The Lord Chancellor Shabana Mahmood has announced wide-ranging changes to criminal justice. Rachel Reeves and Starmer seem far more interested in getting value for taxpayers than Boris Johnson, who threw money at problems, without asking too many questions. Under Reeves there will be no wild tax-and-spending spree, at least not for a while.

Starmer remains shy about his intention to improve relations with the EU, despite a majority of the country experiencing buyers’ remorse over Brexit. But this will be a long game. The big fireworks will not be there — but over planning reform and welfare. 

Labour’s signature policy, housebuilding, will be a monstrous fight. Boris Johnson had to water down his plans for planning reform despite having an 80 seat majority. Starmer’s majority is just over twice that size: but some of the most sensitive constituencies have newly minted Labour MPs with slender majorities. Those in rural seats may also come under pressure when it becomes clear that the march to net zero needs pylons. Meanwhile many Liberal Democrats were elected on Nimby tickets. Starmer will need to prove, early, how his new builds will be high-quality housing, not substandard boxes.

The other battle to come has barely been mentioned: welfare. Almost as soon as the King’s Speech was over, Labour and SNP backbenchers criticised the new government for keeping the 2017 cap on child benefits. Former shadow chancellor John McDonnell had threatened to bring the house down over it. Starmer has tried to defuse the issue by establishing a child poverty task force. But the stage is set for an almighty clash between backbenchers and campaign groups which believe families need more support, and a Treasury which must tackle both high welfare bills and Britain’s record levels of economic inactivity.

When money is tight, politicians are attracted to policies that look cheap. Planning reform and employment rights fall into that category — although the latter may impose significant costs on business. So do the proposed bills to enshrine equal pay rights for minorities and the disabled, and to ban conversion therapy. Such bills can keep backbenchers busy, buy off campaign groups, and make a government look dynamic while it tries to sort out trickier challenges. They can also have profound and sometimes unintended consequences. 

Starmer has set himself a phenomenal task: to “take the brakes off Britain”, fix public services and restore faith in government. During the campaign he talked about a 10-year plan. But his big majority was also shallow. Voters are still sceptical about Labour, and about the ability of any government to deliver. This puts him under even more pressure to deliver fast on the big promises — like reducing NHS waiting lists. 

The honeymoon may last longer than strategists fear, especially if Labour pursues genuine reform and value for money, and doesn’t indulge in performative meddling. But it will need to figure out rapidly how to make the machinery work. Starmer has promised to avoid the “temptation of the easy answer”, warning that serious reforms take time. This is something the public understand. But he will need to keep his party together — the country is exasperated with infighting. There’s no gunpowder under parliament, but there are some combustible issues.  

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